List of recessions in the United States
The unofficial beginning and ending dates of recessions in the United States have been defined by the Department of Commerce. The Commerce Department defines a recession as "a significant decline in economic activity spread across the economy, lasting more than two quarters which is 6 months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales". Early recessions and crises Free Banking Era to the Great Depression In the 1830s, U.S. President Andrew Jackson fought to end the Second Bank of the United States. Following the Bank War, the Second Bank lost its charter in 1836. From 1837 to 1862, there was no national presence in banking, but still plenty of state and even local regulation, such as laws against branch banking which prevented diversification. In 1863, in response to financing pressures of the Civil War, Congress passed the National Banking Act, creating nationally chartered banks. There was neither a central bank nor deposit insurance during this era, and thus banking panics were common. Recessions often led to bank panics and financial crises, which in turn worsened the recession. The dating of recessions during this period is controversial. Modern economic statistics, such as gross domestic product and unemployment, were not gathered during this period. Victor Zarnowitz evaluated a variety of indices to measure the severity of these recessions. From 1834 to 1929, one measure of recessions is the Cleveland Trust Company index, which measured business activity and, beginning in 1882, an index of trade and industrial activity was available, which can be used to compare recessions. Great Depression to Reagan Era Following the end of World War II and the large adjustment as the economy adjusted from wartime to peacetime in 1945, the collection of many economic indicators, such as unemployment and GDP, became standardized. Recessions after World War II may be compared to each other much more easily than previous recessions because of these available data. The listed dates and durations are from the official chronology of the National Bureau of Economic Research. GDP data are from the Bureau of Economic Analysis, unemployment from the Bureau of Labor Statistics (after 1948). Note that the unemployment rate often reaches a peak associated with a recession after the recession has officially ended. No recession of the post-World War II era has come anywhere near the depth of the Great Depression. In the Great Depression, GDP fell by 27% (the deepest after demobilization is the recession beginning in December 2007, during which GDP has fallen 5.1% as of the second quarter of 2009) and unemployment rate reached 10% (the highest since was the 10.8% rate reached during the 1981–82 recession). The National Bureau of Economic Research dates recessions on a monthly basis back to 1854; according to their chronology, from 1854 to 1919, there were 16 cycles. The average recession lasted 22 months, and the average expansion 27. From 1919 to 1945, there were six cycles; recessions lasted an average 18 months and expansions for 35. From 1945 to 2001, and 10 cycles, recessions lasted an average 10 months and expansions an average of 57 months. This has prompted some economists to declare that the business cycle has become less severe. Factors that may have contributed to this moderation include the creation of a central bank and lender of last resort, like the Federal Reserve System in 1913, the establishment of deposit insurance in the form of the Federal Deposit Insurance Corporation in 1933, increased regulation of the banking sector, the adoption of interventionist Keynesian economics, and the increase in automatic stabilizers in the form of government programs (unemployment insurance, social security, and later Medicare and Medicaid). See Post-World War II economic expansion for further discussion. Reagan Era to the Labor Crisis Labor Crisis to the Second Depression Second Depression to the Quantum Economic Model Quantum Economic Model to the present Category:21st-century economic history Category:22nd-century economic history